Summary of 3D Chemical Conference Call Company Overview - **Company**: 3D Chemical - **Industry**: Chemical Engineering Key Financial Metrics - **Revenue**: 1.248 billion CNY, up 21.8% year-on-year [2][5] - **Net Profit**: Approximately 120 million CNY, up 46% year-on-year [2][5] - **Net Cash Flow**: Decreased by 84% to over 20 million CNY due to increased bank acceptance bill settlements [2][5] - **Cash Reserves**: Approximately 1.8 billion CNY, with a debt ratio below 18% [2][5] - **Interim Dividend**: 0.1 CNY per share, totaling over 60 million CNY [2][5] Project Developments - **New Contracts**: Over 1 billion CNY in new projects signed, including coal chemical design and general contracting projects in Xinjiang and design fees for Qilu Petrochemical [2][6] - **Potential Orders**: Focus on coal-to-oil and coal-to-olefins projects led by national energy companies, as well as local coal chemical projects [2][6][11] Chemical Sector Performance - **Zibo Nuoao Company**: Profit decreased by 20% to over 70 million CNY due to average product performance, despite benefiting from rising propanol prices [2][7] - **Cellulose Project**: Phase one of the isooctanoic acid project is underway, aiming to increase pilot production capacity to 700-800 tons annually [2][8] Catalyst Business - **Revenue**: Approximately 60-70 million CNY with a profit contribution of 4-5 million CNY in the first half of the year [2][9] - **Annual Revenue Projection**: Expected to reach around 200 million CNY with a profit of about 15 million CNY [2][9] Future Strategy and Capital Expenditure - **Capital Expenditure**: Expected to be around 200 million CNY for new projects, with a focus on high annual profit distribution to investors [2][10] - **Client Selection Strategy**: Emphasis on payment security, primarily targeting large state-owned enterprises to minimize accounts receivable risk [2][18] Competitive Advantages - **Technical Edge**: Leading technology in sulfur recovery with a purity of 99.99% and a recovery rate of 99.9% [2][19] - **Market Reputation**: Strong past performance and reputation in the market [2][19] Future Growth and Dividends - **Dividend Policy**: Clear three-year dividend plan with a target payout ratio of over 70% [2][17] - **Market Expansion**: Interest in niche new materials, particularly in cosmetics, with acquisition standards focusing on synergistic small domestic leaders [2][20] Additional Insights - **Sulfur Recovery Business**: Core business with significant contributions to revenue and profit, having completed 245 sets of sulfur recovery equipment [2][3] - **Environmental Projects**: Engagement in various environmental projects, including air storage and lava storage initiatives [2][13] - **R&D Initiatives**: Development of hydrogen sulfide electrochemical separation technology, which could lead to significant breakthroughs [2][14]

Report Industry Investment Rating - Not provided in the content Core Viewpoints - The pulp market may show a pattern of counter - arbitrage and fluctuate slightly stronger due to the adjustment of deliverable products. After the suspension of the "Bratsk" brand deliverable for bleached sulfate softwood pulp futures, the overall price center of the futures market may rise, and the near - far month spread may widen [78]. Summaries by Relevant Catalogs Industry News - As of June 19, 2025, the pulp inventories in Changshu Port, Qingdao Port, and Gaolan Port in China all increased, with a 0.7% increase in Changshu Port, 1.2% in Qingdao Port, and 2.6% in Gaolan Port. The total inventory of mainstream ports reached 220.8 million tons, a 1.1% increase from the previous period [6]. - The Shanghai Futures Exchange announced the suspension of the warehousing of the "Bratsk" brand deliverable for bleached sulfate softwood pulp futures [6]. - Shandong Sun Paper and its subsidiaries won new industrial land in Beihai, Guangxi and Yanzhou, Shandong [6]. Market Data Market Trends - The basis of Silver Star on June 20, 2025, was 930 yuan/ton, with an 8.39% increase from the previous period and a 124.64% increase year - on - year. The basis of Russian Needle was 130 yuan/ton, with a 124.14% increase from the previous period and a 195.59% increase year - on - year. The price difference between Silver Star and Russian Needle was 800 yuan/ton, unchanged from the previous period but a 45.45% increase year - on - year [14]. - The 09 - 11 month spread on June 20, 2025, decreased by 50% from the previous period, and the 11 - 01 month spread was - 82 yuan/ton, a 7.89% decrease from the previous period [19]. Fundamental Data Price - The price differences between softwood and hardwood pulp (Silver Star - Goldfish, Russian Needle - Goldfish) decreased. On June 20, 2025, the price difference between Silver Star and Goldfish was 1950 yuan/ton, a 2.5% decrease from the previous period but a 160% increase year - on - year. The price difference between Russian Needle and Goldfish was 1150 yuan/ton, a 4.17% decrease from the previous period and a 475% increase year - on - year [26]. - The import profit of Silver Star was positive but continued to decline this week. The hardwood pulp Star had no quotation in June, and partial supply was expected to resume in July [33]. - The prices of imported softwood pulp such as Silver Star, Cariboo, Northwood, and Lion decreased slightly compared to the previous period. The prices of imported hardwood pulp such as Goldfish, Star, and Bird remained stable [35][42]. - The price of Venus was 5100 yuan/ton on June 20, 2025, a 2% increase from the previous period but a 6.42% decrease year - on - year. The price of Kunhe was 3900 yuan/ton, unchanged from the previous period and a 1.3% increase year - on - year [46]. Supply - In April 2025, the European port inventory decreased by 12.77% month - on - month, and the global pulp out - port volume decreased by 18.3% month - on - month and 10.89% year - on - year [50]. - In May 2025, the pulp import volume showed a differentiated performance. The softwood pulp import volume decreased by 4.75% month - on - month, while the hardwood pulp import volume increased by 7.84% month - on - month [53]. Demand - The capacity utilization rates of white cardboard, household paper, offset paper, and coated paper decreased to varying degrees on June 20, 2025. The capacity utilization rates of white cardboard, household paper, offset paper, and coated paper were 72.2%, 62.1%, 54.6%, and 56.55% respectively [58]. - The prices of white cardboard, household paper, offset paper, and coated paper remained stable this week, but the market trading was light, and the raw material procurement enthusiasm was not high [61][64]. - The profit of household paper decreased this period, while the profits of other paper types increased to varying degrees [67]. Inventory - The total inventory of mainstream ports in China reached 220.8 million tons on June 20, 2025, a 1.05% increase from the previous period and a 21.12% increase year - on - year. The inventories in Qingdao Port, Changshu Port, and Gaolan Port all increased [75]. - The warehouse receipt quantity of pulp in warehouses was 23.53 million tons on June 20, 2025, a 1.22% decrease from the previous period and a 50.27% decrease year - on - year. The warehouse receipt quantity in factories was 1.63 million tons, unchanged from the previous period and a 49.25% decrease year - on - year [69]. Operation Suggestions - The pulp market may fluctuate slightly stronger due to the adjustment of deliverable products. The suspension of the "Bratsk" brand deliverable may increase the willingness of buyers to take delivery and raise the overall price center of the futures market. The market may show a counter - arbitrage pattern [78].